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NCUA Update Of Legacy Asset Information Suggests Expected Losses Will Be Lower: CUNA

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ALEXANDRIA, Va. (3/29/13)--The National Credit Union Administration Thursday announced it has updated its websites showing both realized losses for the Temporary Corporate CU Stabilization Fund through December 2012 and expected remaining assessments.

In its announcement release, the NCUA included a "Questions and Answers" document containing the latest information about costs incurred to date and projected future assessment ranges over the life of the stabilization fund. Use the resource link below to access this important information.

The website update followed a Wednesday release of the agency's audited financial statements for the stabilization fund.

Total projected assessments declined $900 million at the upper end between July 2012 and December 2012, the NCUA said, adding that total future remaining assessments are now projected to range between $1.6 billion and $3.9 billion. In comparison, six months ago the total range was $1.9 billion to $4.8 billion. 

On the downside, although not unexpected, the cumulative realized losses and implied writedowns now amount to $6.1 billion, exceeding the combined capital of the five failed corporates at the time of their conservatorships.

On the plus side, the midpoint of the range of remaining assessments dropped by $600 million, from $3.35 billion to $2.75 billion.  

Credit Union National Association Chief Economist Bill Hampel noted that with the revised estimates, the $2.75 billion midpoint could be fully paid with just over three assessments at last year's rate of 9.5 basis points (bp) of insured shares.  If spread over nine years, the annual assessment would only be about 2.5 basis points.

CFPB Launches Database Making 90K Consumer Complaints Available

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WASHINGTON (3/29/13)--Details on more than 90,000 consumer complaints regarding financial products and services are now publicly available, courtesy of a new database launched Thursday by the Consumer Financial Protection Bureau.

"The database is good for consumers and it is also good for honest businesses. We believe the marketplace of ideas can do great things with this data," CFPB Director Richard Cordray said at the unveiling. The bureau said its new consumer database is the nation's largest for such complaints.

The CFPB encouraged citizens to analyze, augment, and build on the database information, and find ways to make the information more useful to consumers. One suggestion offered in a CFPB release was mixing the data with other public data sets to reveal potential trends.

"By sharing these complaints with the public, we are creating greater transparency in consumer financial products and services," Cordray added.

The database features consumer complaints on a wide range of financial products, including mortgages, student loans, bank accounts and services, other consumer loans, credit cards, and sub-categories of many products. Company responses to the consumer complaints are also included, and the database will be updated daily, the CFPB noted.

In total, the bureau  has received 130,000 consumer complaints as of March 1--90,000 of which have already been entered into the database.  CFPB's review of all 130,000 complaints show that:

  • The majority of the complaints involve mortgage loans: Consumers reported 63,700 mortgage issues to the CFPB;
  • Credit card issues accounted for 30,600 of the complaints filed;
  • 19,800 were account and services complaints;
  • 4,600 were private student loan complaints;
  • 4,100 were consumer loan complaints; and
  • 6,700 were credit reporting complaints.
More than 83% of the complaints have been sent on to companies for review and response, and companies have already responded to 95% of these forwarded complaints, the CFPB said.

While credit unions will not likely be the subject of a sizable number of consumer complaints, the Credit Union National Association said the database could have unintended consequences. CUNA has warned that sensitive or confidential business or consumer information could be inadvertently disclosed when consumer complaints are filed in the database. "The bureau should take steps to minimize privacy risks and other unintended consequences," CUNA has said in a series of comment letters.

For more, use the resource link.

NCUA's OSCUI Reports On 2012 Achievements

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ALEXANDRIA, Va. (3/29/13)--In a first, the National Credit Union Administration's Office of Small Credit Union Initiatives (OSCUI) has released its Annual Report to the masses.

Previously, the report was circulated inside the agency. Releasing the report to the general public is part of OSCUI's new communication initiatives, NCUA OSCUI Director Bill Myers noted.

The report notes that OSCUI in 2012:

  • Substantially changed its consulting program, moving to semi-annual enrollments in June and December;
  • Increasingly used electronic media to deliver live and on-demand credit union training;
  • Accepted grant and loan program applications online; and
  • Expanded outreach and partnership efforts.
On-site training was also offered by OSCUI in 2012: In total, 2,129 individuals from 967 credit unions attended one of their 32 workshops held throughout the country.

For the full report, use the resource link.

Security One FCU's Stephens Is CUNA Reg Burden Witness

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WASHINGTON (3/29/13)--Pamela Stephens, president/CEO of Security One FCU, Arlington, Texas, and former Texas Credit Union League board chairman, will testify on behalf of credit unions and the Credit Union National Association at an April 10 hearing on credit union regulatory relief.

In her testimony, Stephens will provide detailed suggestions how federal lawmakers can ease the regulatory burden on credit unions. She will be testifying before the House Financial Services subcommittee on financial institutions and consumer credit.

The hearing is part of a 2013 series to study, in part, the impact of the Dodd-Frank Act, and will take place one week before an April 16 hearing on bank regulatory issues.

"After dozens of hearings in the last Congress on regulatory burden, the House Financial Services Committee is sending a message through this regulatory relief hearing that they've heard the concerns and they want to hear about solutions. We're ready to put some solutions on the table, and we're hopeful that the committee and Congress will embrace them and enact them," CUNA Senior Vice President of Legislative Affairs Ryan Donovan said.

Similar regulatory burden discussions took place in 2012, and CUNA testified on how the growth of financial services regulations has negatively impacted how credit unions lend to and serve their members.

The upcoming regulatory burden hearings are expected to be a precursor to a legislative package to address what CUNA has called a "crisis of creeping complexity" in financial institution regulation.

FASB Extends Credit Loss Comment Deadline To May 31

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WASHINGTON (3/29/13)--The Financial Accounting Standards Board (FASB) has pushed back the deadline for comments on its credit loss reporting proposal until May 31. The previous deadline was April 30.

FASB's credit loss reporting proposal would utilize a single "expected loss" measurement for the recognition of credit losses; this would replace the multiple existing impairment models in U.S. generally accepted accounting principles that primarily use an "incurred loss" approach.

"The delay is a good development, but we are very concerned about this proposal," Credit Union National Association Deputy General Counsel Mary Dunn said Thursday. If adopted, the proposal would likely result in credit unions and other creditors having to initially boost their allowance for loan and lease loss accounts by significant amounts and to estimate cash flows that they do not anticipate will be collected over the life of the loan based on all available information, including forecasts of future events, CUNA has noted.

CUNA continues to develop a comment letter on this accounting issue, and will release that letter in the coming weeks.